Benjamin Franklin

How can the average American afford to pursue civil justice? 

Civil litigation can be prohibitively expensive to pursue, especially if you’re involved in a complicated case. Often, the only way the average American can afford to pursue civil justice is through a “contingent fee” agreement with a lawyer. 

Black’s Law Dictionary defines the contingent fee as “[a] fee charged for a lawyer’s services only if the lawsuit is successful or is favorably settled out of court.”  

In other words, you don’t pay attorney fees unless you win the case. If you recover damages from a settlement or a favorable verdict, your lawyer will be paid a percentage of your award--usually between 20% and 50%, depending on the jurisdiction and what you and your lawyer agreed to in advance. If you lose your case, you pay no fees for the lawyer’s time.

Let’s say you’ve had an auto accident and you decide to hire an attorney. If you shop around, you’ll find that contingent-fee agreements vary from lawyer to lawyer. For the sake of simplicity, we’ll say you hire an attorney on a 40% contingent-fee agreement. If you receive a $10,000.00 judgment or settlement, your attorney will get $4,000.

“The obvious advantage is not having to pay a large monthly bill from your lawyer while your claim makes its way through the courts,” write J. Gardner Hodder and Neil Sacks, two Canadian attorneys, in their online article What is a Contingency Fee? Further, you have the peace of mind knowing that you will not be obligated to pay any fee whatsoever if you are not successful in your case.”

Contingent fee agreements provide access to the courts for those who could not otherwise afford the cost of civil litigation.

In general, a lawyer will charge anywhere from $100 to $300 an hour. Not many people can afford to pay that kind of money to an attorney for more than a few hours. If you were to pay an hourly fee to bring a complicated case to trial, you might wind up spending more than $50,000 in attorney fees alone.

Contingent fee agreements discourage inconsequential litigation.

A lawyer working on a contingent-fee basis is unlikely to spend thousands of dollars and hundreds of hours on a case he’s not confident he can win.  In this way, contingent-fee agreements actually function as a screening mechanism to help keep weaker lawsuits out of the system.

Contingent fee agreements enable us to hold wrongdoers fully accountable in a court of law.

No case is “easy.” But generally, the more complicated the case, the harder it is to win. Contingent-fee agreements can encourage lawyers to take a complex case to trial rather than settling for a fraction of the compensation to which his client is entitled.

Contingent-fee agreements help level the financial playing field between citizen plaintiffs and corporate defendants. 

Corporations can deduct the costs of mounting a legal defense from their taxes. But ordinary citizens can’t.  Contingent-fee agreements make it possible for the average American to hold corporate juggernauts that violate safety standards or engage in harmful business practices accountable in a court of law. 

Contingent-fee agreements can motivate an attorney to work harder to win the case.  

When a lawyer charges by the hour for his time, the outcome of the case makes no difference in his bottom line. But, if he only gets paid when he wins the case, he will undoubtedly do whatever he can to ensure a successful outcome for his client.

What would happen if there were no contingent-fee agreements? Only the very rich would be able to file lawsuits.

Limiting or eliminating your access to contingent fee arrangements with an attorney are part of a special-interest agenda known as tort “reform.”  Doing so would reduce the average American’s access to civil justice and also discourage lawyers from taking on complicated cases.

Is it any surprise then that some powerful special interest groups are attacking the contingent-fee agreement? They argue that it’s not fair for attorneys to take such a “large percentage” of any recovery of their clients. Their arguments have worked: About 20 states have put limits on the percentage an attorney can take.

Damage caps and attorney-fee caps work together to make the complicated cases less enticing for lawyers. The consequence is that those who traditionally receive large jury verdicts – the catastrophically injured, or the families of those who are killed – won’t be able to afford an attorney and those responsible won’t be held accountable.

Justice for all is a beautiful thing. This just wouldn’t be America without it.